Just as Time Warner Cable has cut a deal with the Los Angeles Dodgers for a new baseball channel, which could add $5 to customers' bills regardless of whether they watch the channel, the company is jacking up rates for nearly all its other TV services.
The latest rate hikes also come amid ongoing losses in the number of TV subscribers — as opposed to, say, high-speed Internet customers — throughout the cable industry. Cable companies are thus squeezing more money from fewer TV viewers.
"These are outrageous increases," said Jamie Court, president of Consumer Watchdog, a Santa Monica advocacy group. "Cable and satellite companies get away with raising rates because they know that customers have nowhere else to turn."
But that could change. At some point, possibly soon, the cable and the satellite industries will go a rate hike too far, prompting even more customers to pull the plug and turn instead to online services such as Netflix.
Time Warner subscribers are being notified in their latest bill that the monthly cost of basic cable service will jump 8.2%, or almost four times the annual rate of inflation as of October 2012 — to $72.50 from $67.
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The cost of receiving local channels will climb 17.6%, to $20 from $17 a month.
Like to skip commercials by recording shows on your digital video recorder? That monthly cost will rise for many customers 18.6%, to $12.99 from $10.95.
If you have other services, such as Internet, you can expect your monthly cable programming cost to rise $3 to $5 after existing promotional rates expire, Time Warner says.
"As is evident from recent media coverage, our industry has seen programming costs increase in double digits," said Milinda Martin, a Time Warner spokeswoman. "Time Warner Cable has worked hard to keep our costs down and provide a wide range of choices for customers, and we have added new channels, on-demand content and HD offerings to our lineup."
It's tempting to conclude that Time Warner is padding its pockets in light of its hugely expensive deal to create SportsNet LA, a Dodgers-centric channel expected to be up and running by next year and costing Time Warner $7 billion to $8 billion.
Time Warner already has cut a similar deal with the Los Angeles Lakers for a basketball channel dubbed Time Warner Cable SportsNet.
The cable giant charges other cable and satellite companies about $4 a month to carry the Lakers channel. The added cost is typically passed along to customers of those companies.
Analysts expect the added cost to cable and satellite viewers for the Dodgers channel will be in the vicinity of $5 a month.
"This is about a corporate buying spree and Time Warner taking it out on the backs of customers," Court said.
While that may indeed be an element of the latest rate hikes, Time Warner is by no means alone in reaching deeper into customers' pockets.
Rival Comcast raised rates for its California customers, mainly in the Bay Area, an average of 4.3% last year. Bryan Byrd, a company spokesman, said rates are scheduled to go up again this summer because of "increased programming and operating costs."
On the satellite front, Robert Mercer, a DirecTV spokesman, said the average customer's bill will rise about 4.5% beginning Feb. 7.
"The new pricing reflects the significant increase in the cost of programming and of course the investments we make to enhance our customer's viewing experience," he said.
John Hall, a spokesman for Dish Network, said the cost of core programming packages rose $5 as of Jan. 17 "to account for significant increases in programming costs."
